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Economic Interdependence In Asia: Developing Indicators For Regional Integration And Cooperation

Author

Listed:
  • GIOVANNI CAPANNELLI

    (Office of Regional Economic Integration, Asian Development Bank, 6, ADB Avenue, Mandaluyoung City, Metromanila, Philippines)

  • JONG-WHA LEE

    (Economics and Research Department, Asian Development Bank, 6, ADB Avenue, Mandaluyoung City, Metromanila, Philippines)

  • PETER A. PETRI

    (International Business School, Brandeis University, 415 South Street, Waltham, MA 02454, USA)

Abstract

We develop indicators to measure the degree of economic integration and cooperation among East Asian economies and compare these with similar measures for other regions. Our indicators cover regional integration in trade, investment, financial assets, and people-to-people exchange. We also analyze measures of regional cooperation such as the density of free trade agreements and official policy dialogues. We find that in various Asian groupings, and especially in a group of 16 integrating Asian economies, interdependence in trade, direct investment, financial flows, and other forms of economic and social exchange has increased significantly over time, and now approaches that in the European Union. Nonetheless, Asia's official cooperation remains weak and formal regional institutions remain relatively underdeveloped. To provide insight into the causes of this discrepancy, we also develop quantitative measures of political and cultural similarity of nations, and find that Asian countries have relatively low levels of political and cultural proximity compared to regions such as Europe. The diversity of political interests and cultural values may have hindered more intense cooperation among Asian economies in the past. But if regional economic and social interactions continue to grow, requirements for joint decision-making are also likely to expand, leading to stronger frameworks of official cooperation.

Suggested Citation

  • Giovanni Capannelli & Jong-Wha Lee & Peter A. Petri, 2010. "Economic Interdependence In Asia: Developing Indicators For Regional Integration And Cooperation," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 55(01), pages 125-161.
    • Handle: RePEc:wsi:serxxx:v:55:y:2010:i:01:n:s021759081000364x
    DOI: 10.1142/S021759081000364X
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    References listed on IDEAS

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    Cited by:

    1. Fithra Faisal Hastiadi, 2012. "China-Japan-Korea (CJK)'s FTA Strategy towards ASEAN Countries: A Game Theoretical Approach," Working Papers in Economics and Business 201210, Faculty of Economics and Business, University of Indonesia, revised Oct 2012.
    2. Capannelli, Giovanni, 2011. "Institutions for Economic and Financial Integration in Asia: Trends and Prospects," ADBI Working Papers 308, Asian Development Bank Institute.
    3. Sanjay Sehgal & Piyush Pandey & Florent Deisting, 2018. "Time varying integration amongst the South Asian equity markets: An empirical study," Cogent Economics & Finance, Taylor & Francis Journals, vol. 6(1), pages 1452328-145, January.
    4. Sanjay Sehgal & Piyush Pandey & Florent Deisting, 2018. "Stock Market Integration Dynamics and its Determinants in the East Asian Economic Community Region," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 16(2), pages 389-425, June.
    5. Berdiev, Aziz N. & Chang, Chun-Ping, 2015. "Business cycle synchronization in Asia-Pacific: New evidence from wavelet analysis," Journal of Asian Economics, Elsevier, vol. 37(C), pages 20-33.
    6. Sanjay Sehgal & Piyush Pandey & Florent Deisting, 2018. "Time varying integration amongst the South Asian equity markets: An empirical study," Cogent Economics & Finance, Taylor & Francis Journals, vol. 6(1), pages 1452328-145, January.
    7. Michael I. Magcamit & Alexander C. Tan, 2016. "East and South China Seas Maritime Dispute Resolution and Escalation: Two Sides of the Same Coin?," Journal of Asian Security and International Affairs, , vol. 3(2), pages 113-134, August.
    8. Genc, Ismail H., 2022. "Are Indian Subcontinent remittance markets connected to each other?," Journal of Asian Economics, Elsevier, vol. 80(C).

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